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Stock Keeping Unit

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A SKU stock keeping unit (SKU) is a unique identifier for a specific product or item in a company’s inventory management system. It is a code used to track inventory levels, order quantities, and other information related to each item.

Key Components of a SKU:

  • Item Code: A numerical or alphabetical code that uniquely identifies each item.
  • Product Attributes: Attributes such as size, color, flavor, or other relevant factors that differentiate the item.
  • Location Code: A code that indicates the physical location of the item in the warehouse or store.
  • Batch Number: A unique identifier for a specific batch of items with the same characteristics.
  • Expiration Date: The date when the item is expected to expire or be replaced.

Benefits of SKU Stock Keeping Units:

  • Improved Inventory Accuracy: SKU SKUs help track inventory levels accurately, reducing errors and waste.
  • Efficient Order Fulfillment: SKUs streamline order fulfillment by providing a single point of reference for each item.
  • Inventory Optimization: SKU SKUs allow companies to optimize inventory levels based on demand and usage patterns.
  • Track Inventory Movement: SKUs track inventory movement and identify trends, enabling better inventory management.
  • Reduced Costs: By reducing inventory errors and optimizing inventory levels, SKUs can help reduce costs associated with inventory management.

Examples:

  • A company sells a blue t-shirt in size medium and large. The SKU for the medium size might be “ABC12M,” while the SKU for the large size would be “ABC12L.”
  • A grocery store has a SKU for each type of fruit, such as “FR01” for apples, “FR02” for oranges, and “FR03” for grapes.

Additional Notes:

  • SKUs are used in various inventory management systems, including Enterprise Resource Planning (ERP) systems.
  • The format and length of SKUs can vary depending on industry and company practices.
  • SKUs are dynamic and can be adjusted over time as items are updated or new items are added to the inventory.

FAQs

  1. What is an SKU?

    SKU, or Stock Keeping Unit, is a unique identifier assigned to each product in a retailerโ€™s inventory, used to track stock levels, sales, and product details.

  2. What is an example of a SKU?

    An SKU example could be SHRT-BLK-MED, representing a black shirt in medium size. Each part of the code helps identify product attributes like type, color, and size.

  3. What is the purpose of an SKU?

    SKUs help in inventory management by tracking product stock levels, simplifying reordering, and making it easier to manage product details within a store or warehouse.

  4. What are SKU codes, and how are they different from UPCs?

    SKU codes are unique to each business and help in internal inventory tracking, while UPCs (Universal Product Codes) are standardized barcodes used globally to identify products, often found on packaging.

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